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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Proxy Statement Pursuant To Section 14(a)
Of the Securities Exchange Act Of 1934
|X| Filed by the Registrant
|_| Filed by a Party other than the Registrant
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|X| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
DATAMARK HOLDING, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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The Registrant is making this filing in order to file a copy of the
Amended and Restated DataMark Holding, Inc. Stock Incentive Plan pursuant to
Instruction 3 to Item 10 of Regulation 14-A. The document was inadvertently
omitted when the Registrant's Definitive Proxy Statement was filed.
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AMENDED AND RESTATED
DATAMARK HOLDING, INC.
INCENTIVE PLAN
(formerly known as the Omnibus Stock Option Plan)
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TABLE OF CONTENTS
Page
1. Background and Purpose.................................................1
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2. Definitions............................................................1
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2.1 "Adjusted Fair Market Value".....................................1
2.2 "Affiliate"......................................................1
2.3 "Agreement"......................................................1
2.4 "Award"..........................................................1
2.5 "Board"..........................................................1
2.6 "Cause"..........................................................1
2.7 "Change in Capitalization".......................................2
2.8 "Change in Control"..............................................2
2.9 "Code"...........................................................3
2.10 "Committee"......................................................3
2.11 "Company"........................................................3
2.12 "Director".......................................................3
2.13 "Director Option"................................................3
2.14 "Disability".....................................................3
2.15 "Division".......................................................4
2.16 "Dividend Equivalent Right"......................................4
2.17 "Eligible Director"..............................................4
2.18 "Eligible Individual"............................................4
2.19 "Employee Option"................................................4
2.20 "Exchange Act"...................................................4
2.21 "Fair Market Value"..............................................4
2.22 "Grantee"........................................................4
2.23 "Incentive Stock Option".........................................4
2.24 "Nonemployee Director"...........................................4
2.25 "Nonqualified Stock Option"......................................4
2.26 "Option".........................................................4
2.27 "Optionee".......................................................5
2.28 "Outside Director"...............................................5
2.29 "Parent".........................................................5
2.30 "Performance Awards".............................................5
2.31 "Performance Cycle"..............................................5
2.32 "Performance Objectives".........................................5
2.33 "Performance Shares".............................................5
2.34 "Performance Units"..............................................5
2.35 "Plan"...........................................................5
2.36 "Pooling Transaction"............................................5
2.37 "Restricted Stock"...............................................5
2.38 "Shares".........................................................5
2.39 "Stock Appreciation Right".......................................5
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2.40 "Subsidiary".....................................................5
2.41 "Successor Corporation"..........................................5
2.42 "Ten-Percent Stockholder"........................................5
2.43 "Termination of Employment"......................................6
3. Administration.........................................................6
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3.1 The Committee....................................................6
3.2 The Committee Powers.............................................6
4. Stock Subject to the Plan..............................................7
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4.1 Maximum Shares...................................................7
4.2 Adjustments to Shares............................................7
4.3 Effect of Expiration, Cancellation or Termination................8
5. Option Grants for Eligible Individuals.................................8
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5.1 Authority of Committee...........................................8
5.2 Purchase Price...................................................8
5.3 Maximum Duration.................................................8
5.4 Vesting..........................................................8
5.5 Modification.....................................................8
6. Option Grants for Eligible Directors...................................8
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6.1 Grant of Options to Eligible Directors...........................8
6.2 Purchase Price...................................................9
6.3 Maximum Duration.................................................9
6.4 Vesting..........................................................9
6.5 Modification.....................................................9
7. Terms and Conditions Applicable to All Options.........................9
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7.1 Transferability..................................................9
7.2 Method of Exercise...............................................9
7.3 Rights of Optionees.............................................10
7.4 Effect of Change in Control.....................................10
8. Stock Appreciation Rights.............................................10
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8.1 Time of Grant...................................................10
8.2 Stock Appreciation Right Related to an Option...................11
8.3 Stock Appreciation Right Unrelated to an Option.................11
8.4 Method of Exercise..............................................11
8.5 Form of Payment.................................................11
8.6 Modification....................................................12
8.7 Effect of Change in Control.....................................12
9. Dividend Equivalent Rights............................................12
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10. Restricted Stock......................................................12
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10.1 Grant...........................................................12
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10.2 Rights of Grantee...............................................12
10.3 Non-transferability.............................................13
10.4 Lapse of Restrictions...........................................13
10.5 Modification or Substitution....................................13
10.6 Treatment of Dividends..........................................13
10.7 Delivery of Shares..............................................13
11. Performance Awards....................................................13
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11.1 Performance Objectives..........................................13
11.2 Performance Units...............................................14
11.3 Performance Shares..............................................14
11.4 Effect of Change in Control.....................................15
11.5 Modification or Substitution....................................16
12. Effect of a Termination of Employment; Forfeiture Provisions..........16
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12.1 Termination of Employment.......................................16
12.2 Forfeiture Provisions...........................................17
13. Adjustment Upon Changes in Capitalization.............................17
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14. Effect of Certain Transactions........................................18
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15. Interpretation........................................................18
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16. Pooling Transactions..................................................18
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17. Effective Date, Termination and Amendment of the Plan.................18
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18. Non-Exclusivity of the Plan...........................................19
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19. Limitation of Liability...............................................19
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20. Regulations and Other Approvals; Governing Law........................19
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20.1 Governing Law...................................................19
20.2 Applicable Laws.................................................19
20.3 Rules and Regulations...........................................19
20.4 Securities Regulations..........................................20
20.5 Restrictions on Shares..........................................20
21. Miscellaneous.........................................................20
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21.1 Multiple Agreements.............................................20
21.2 Withholding of Taxes............................................20
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AMENDED AND RESTATED
DATAMARK HOLDING, INC.
INCENTIVE PLAN
(formerly known as the Omnibus Stock Option Plan)
1. Background and Purpose. Effective September 30, 1994, DataMark Holding,
Inc. (the "Company") established the Omnibus Stock Option Plan (the "Original
Plan") for employees and consultants. Effective October 17, 1997, the Original
Plan was amended and restated, subject to shareholder approval, to provide a
more flexible, long-term incentive plan. The Original Plan was also renamed the
"DataMark Holding, Inc. Incentive Plan." The Original Plan, as amended and
restated, is hereinafter referred to as the "Plan."
The purpose of this Plan is to strengthen DataMark Holding, Inc. (the
"Company"), by providing an incentive to its employees, officers, consultants
and directors and thereby encouraging them to devote their abilities and
industry to the success of the Company's business enterprise. It is intended
that this purpose be achieved by extending to employees, officers, consultants
and directors of the Company and its Subsidiaries long-term incentives for high
levels of performance and consistent efforts through the grant of Incentive
Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Dividend
Equivalent Rights, Performance Awards and Restricted Stock (as each term is
herein defined).
2. Definitions. For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a Change in
Control, the greater of (i) the highest price per Share paid to holders of the
Shares in any transaction (or series of transactions) constituting or resulting
in a Change in Control or (ii) the highest Fair Market Value of a Share during
the sixty (60) day period ending on the date of a Change in Control.
2.2 "Affiliate" means any entity, directly or indirectly, controlled
by, controlling or under common control with the Company or any corporation or
other entity acquiring, directly or indirectly, all or substantially all the
assets and business of the Company, whether by operation of law or otherwise.
2.3 "Agreement" means the written agreement between the Company and
an Optionee or Grantee evidencing the grant of an Option or Award and setting
forth the terms and conditions thereof.
2.4 "Award" means a grant of Restricted Stock, a Stock Appreciation
Right, a Performance Award, a Dividend Equivalent Right or any or all of them.
2.5 "Board" means the Board of Directors of the Company.
2.6 "Cause" shall mean:
(a) for purposes of Section 6.4, (i) a willful act which
constitutes gross misconduct or fraud and which is materially injurious to the
Company or (ii) conviction of, or plea of "guilty" or "no contest" to, a felony;
and
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(b) in all other cases, either (1) the definition set forth in
the employment agreement between the Optionee or Grantee, or in absence thereof,
(2)(i) intentional failure to perform reasonably assigned duties, (ii)
dishonesty or willful misconduct in the performance of duties, (iii) involvement
in a transaction in connection with the performance of duties to the Company or
any of its Subsidiaries which transaction is adverse to the interests of the
Company or any of its Subsidiaries and which is engaged in for personal profit
or (iv) willful violation of any law, rule or regulation in connection with the
performance of duties (other than traffic violations or similar offenses).
2.7 "Change in Capitalization" means any increase or reduction in
the number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company or another corporation, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property dividend,
combination or exchange of shares, repurchase of shares, change in corporate
structure or otherwise.
2.8 "Change in Control" shall mean the occurrence during the term of
the Plan of any of the following events:
(1) An acquisition (other than directly from the Company or
pursuant to options granted under this Plan or otherwise by the Company) of any
voting securities of the Company (the "Voting Securities") by any "Person" (as
the term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) immediately after which
such Person has 'Beneficial Ownership' (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of the
combined voting power of the Company's then outstanding Voting Securities;
provided, however, in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a "Non-Control Acquisition" (as defined
below) shall not constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an acquisition by (A) an
employee benefit plan (or a trust forming a part thereof) maintained by (i) the
Company or (ii) any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly or
indirectly by the Company (a "Company Subsidiary"), (B) the Company or any
Company Subsidiary, or (C) any Person in connection with a "Non-Control
Transaction" (as defined below);
(2) The individuals who, as of September 1, 1997, are members
of the Board of Directors (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the Board of Directors; provided, however,
that if the election, or nomination for election by the Company's stockholders,
of any new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the Plan, be
considered as a member of the Incumbent Board; provided, further, however, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors (a "Proxy
Contest") including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(3) Approval by stockholders of the Company of:
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(A) A merger, consolidation or reorganization involving
the Company, unless
(i) the stockholders of the Company immediately
before such merger, consolidation or reorganization own, directly or indirectly,
immediately following such merger, consolidation or reorganization, at least
seventy-five percent (75%) of the combined voting power of the outstanding
voting securities of the corporation resulting from merger or consolidation or
reorganization (the "Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such merger, consolidation or reorganization constitute at least two-thirds
of the members of the board of directors of the Surviving Corporation, and
(iii) no Person (other than the Company or any
Company Subsidiary, any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the Surviving Corporation or any Company's
Subsidiary, or any Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of twenty percent (20%) or more of
the then outstanding Voting Securities) has Beneficial Ownership of twenty
percent (20%) or more of the combined voting power of the Surviving
Corporation's then outstanding voting securities.
A transaction described in clauses (i) through (iii) shall herein be referred to
as a "Non-Control Transaction;"
(B) A complete liquidation or dissolution of the
Company; or
(C) An agreement for the sale or other disposition of
all or substantially all of the assets of the Company to any Person (other than
a transfer to a Company Subsidiary).
Notwithstanding the foregoing, a Change of Control shall not
be deemed to occur solely because any person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares beneficially owned by the Subject Person;
provided, however, that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the Company, the Subject
Person becomes the Beneficial Owner of any additional Voting Securities which
increases the percentage of the then outstanding Voting Securities beneficially
owned by the Subject Person, then a Change in Control shall occur.
2.9 "Code" means the Internal Revenue Code of 1986, as amended.
2.10 "Committee" means a committee, as described in Section 3.1,
appointed by the Board from time to time to administer the Plan and to perform
the functions set forth herein.
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2.11 "Company" means DataMark Holding, Inc.
2.12 "Director" means a director of the Company.
2.13 "Director Option" means an Option granted pursuant to Section
6.
2.14 "Disability" means:
(a) in the case of an Optionee or Grantee whose employment
with the Company or a Subsidiary is subject to the terms of an employment
agreement between such Optionee or Grantee and the Company or Subsidiary, which
employment agreement includes a definition of "Disability," the term
"Disability" as used in this Plan or any Agreement shall have the meaning set
forth in such employment agreement during the period that such employment
agreement remains in effect; and
(b) in all other cases, the term "Disability" as used in this
Plan or any Agreement shall mean a physical or mental infirmity which impairs
the Optionee's or Grantee's ability to perform substantially his or her duties
for a period of one hundred eighty (180) consecutive days.
2.15 "Division" means any of the operating units or divisions of the
Company designated as a Division by the Committee.
2.16 "Dividend Equivalent Right" means a right to receive all or
some portion of the cash dividends that are or would be payable with respect to
Shares.
2.17 "Eligible Director" means a director of the Company who is not
an employee of the Company or any subsidiary thereof.
2.18 "Eligible Individual" means any director (other than an
Eligible Director), officer or employee of the Company or a Subsidiary, or any
consultant or advisor who is receiving cash compensation from the Company or a
Subsidiary, designated by the Committee as eligible to receive Options or Awards
subject to the conditions set forth herein.
2.19 "Employee Option" means an Option granted pursuant to Section
5.
2.20 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.21 "Fair Market Value" on any date means the closing sales price
for a Share on such date on the NASDAQ Small Cap Market or such other stock
exchange or quotation system determined by the Company to be the primary market
for the Shares or, if there have been no published bid or asked quotations with
respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and, in the case of an Incentive Stock
Option, in accordance with Section 422 of the Code.
2.22 "Grantee" means a person to whom an Award has been granted
under the Plan.
2.23 "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.
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2.24 "Nonemployee Director" means a director of the Company who is a
'nonemployee director' within the meaning of Rule 16b-3 promulgated under the
Exchange Act.
2.25 "Nonqualified Stock Option" means an Option which is not an
Incentive Stock Option.
2.26 "Option" means a Nonqualified Stock Option, an Incentive Stock
Option, a Director Option, or any or all of them.
2.27 "Optionee" means a person to whom an Option has been granted
under the Plan.
2.28 "Outside Director" means a director of the Company who is an
'outside director' within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.
2.29 "Parent" means any corporation which is a parent corporation
(within the meaning of Section 424(e) of the Code) with respect to the Company.
2.30 "Performance Awards" means Performance Units, Performance
Shares or either or both of them.
2.31 "Performance Cycle" means the time period specified by the
Committee at the time Performance Awards are granted during which the
performance of the Company, a Subsidiary or a Division will be measured.
2.32 "Performance Objectives" has the meaning set forth in Section
11.
2.33 "Performance Shares" means Shares issued or transferred to an
Eligible Individual under Section 11.
2.34 "Performance Units" means Performance Units granted to an
Eligible Individual under Section 11.
2.35 "Plan" means the DataMark Holding, Inc. Incentive Plan, as
amended and restated from time to time.
2.36 "Pooling Transaction" means an acquisition of the Company in a
transaction which is intended to be treated as a 'pooling of interests' under
generally accepted accounting principles.
2.37 "Restricted Stock" means Shares issued or transferred to an
Eligible Individual pursuant to Section 10.
2.38 "Shares" means the Common Stock of the Company, $.0001 par
value.
2.39 "Stock Appreciation Right" means a right to receive all or
some portion of the increase in the value of the Shares as provided in Section 8
hereof.
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2.40 "Subsidiary" means any corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) with respect to
the Company.
2.41 "Successor Corporation" means a corporation, or a parent or
subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.
2.42 "Ten-Percent Stockholder" means an Eligible Individual, who, at
the time an Incentive Stock Option is to be granted to him or her, owns (within
the meaning of Section 422(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, or of a Parent or a Subsidiary.
2.43 "Termination of Employment" means the later of (i) a severance
of the employer-employee relationship with the Company or (ii) the resignation,
removal or termination of an officer of the Company.
3. Administration.
3.1 The Committee. The Plan shall be administered by the Committee,
which shall hold meetings at such times as may be necessary for the proper
administration of the Plan. The Committee shall keep minutes of its meetings. A
quorum shall consist of not fewer than two members of the Committee and a
majority of a quorum may authorize any action. Any decision or determination
reduced to writing and signed by a majority of all of the members of the
Committee shall be as fully effective as if made by a majority vote at a meeting
duly called and held. The Committee shall consist of at least two (2) directors
of the Company and may consist of the entire Board; provided, however, that (A)
if the Committee consists of less than the entire Board, each member shall be a
Nonemployee Director and (B) to the extent necessary for any Option or Award
intended to qualify as performance-based compensation under Section 162(m) of
the Code to so qualify, each member of the Committee, whether or not it consists
of the entire Board, shall be an Outside Director. No member of the Committee
shall be liable for any action, failure to act, determination or interpretation
made in good faith with respect to this Plan or any transaction hereunder,
except for liability arising from his or her own willful misfeasance, gross
negligence or reckless disregard of his or her duties. The Company hereby agrees
to indemnify each member of the Committee for all costs and expenses and, to the
extent permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or otherwise
dealing with any claim, cause of action or dispute of any kind arising in
connection with any actions in administering this Plan or in authorizing or
denying authorization to any transaction hereunder. Notwithstanding the
foregoing, the Committee shall have no discretion, power or authority with
respect to Director Options granted pursuant to Section 6 to Eligible Directors.
The grant of Director Options to Eligible Directors shall be administered by the
entire Board, which shall have the power and authority to grant Director Options
to Eligible Directors, on such terms and conditions as they may determine, in
their sole discretion, consistent with the provisions of Section 6.
3.2 The Committee Powers. Subject to the express terms and
conditions set forth herein, the Committee shall have the power from time to
time to:
(a) determine those Eligible Individuals to whom Employee
Options shall be granted under the Plan and the number of such Employee Options
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to be granted and to prescribe the terms and conditions (which need not be
identical) of each such Employee Option, including the purchase price per Share
subject to each Employee Option, and make any amendment or modification to any
Option Agreement consistent with the terms of the Plan;
(b) select those Eligible Individuals to whom Awards shall be
granted under the Plan and to determine the number of Stock Appreciation Rights,
Performance Awards, Shares of Restricted Stock and/or Dividend Equivalent Rights
to be granted pursuant to each Award, the terms and conditions of each Award,
including the restrictions or Performance Objectives relating to Shares, the
maximum value of each Performance Share and make any amendment or modification
to any Award Agreement consistent with the terms of the Plan;
(c) to construe and interpret the Plan and the Options and
Awards granted hereunder and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable so that the Plan complies with applicable
law including Rule 16b-3 under the Exchange Act and the Code to the extent
applicable, and otherwise to make the Plan fully effective. All decisions and
determinations by the Committee in the exercise of this power shall be final,
binding and conclusive upon the Company, its Subsidiaries, the Optionees and
Grantees, and all other persons having any interest therein;
(d) to determine the duration and purposes for leaves of
absence which may be granted to an Optionee or Grantee on an individual basis
without constituting a termination of employment or service for purposes of the
Plan;
(e) to exercise its discretion with respect to the powers and
rights granted to it as set forth in the Plan; and
(f) generally, to exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best interests of the
Company with respect to the Plan.
4. Stock Subject to the Plan.
4.1 Maximum Shares. The maximum number of Shares that may be made
the subject of Options and Awards granted under the Plan is 2,500,000 (inclusive
of all grants made prior to the amendment and restatement of this Plan;
provided, however, that in the aggregate, not more than one-third of the number
of allotted Shares may be made the subject of Restricted Stock Awards under
Section 10 of the Plan; and provided, further, that during the term of the Plan
(i) no Eligible Individual may be granted Options and Awards (other than Awards
described in clause (ii) below) in the aggregate in respect of more than 250,000
Shares per calendar year, (ii) the maximum dollar amount that any Eligible
Individual may receive during the term of the Plan in respect of Performance
Units denominated in dollars may not exceed 100% of the aggregate base salary of
such Eligible Individual and (iii) the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options granted under the Plan become
exercisable for the first time by an Optionee during any calendar year shall not
exceed $100,000. Upon a Change in Capitalization, the maximum number of Shares
referred to in the preceding sentence shall be adjusted in number and kind
pursuant to Section 13. The Company shall reserve for the purposes of the
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Plan, out of its authorized but unissued Shares or out of Shares held in the
Company's treasury, or partly out of each, such number of Shares as shall be
determined by the Board.
4.2 Adjustments to Shares. Upon the granting of an Option or an
Award, the number of Shares available under Section 4.1 for the granting of
further Options and Awards shall be reduced as follows:
(a) In connection with the granting of an Option or an Award
(other than the granting of a Performance Unit denominated in dollars), the
number of Shares shall be reduced by the number of Shares in respect of which
the Option or Award is granted or denominated.
(b) In connection with the granting of a Performance Unit
denominated in dollars, the number of Shares shall be reduced by an amount equal
to the quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.
4.3 Effect of Expiration, Cancellation or Termination. Whenever any
outstanding Option or Award or portion thereof expires, is canceled or is
otherwise terminated for any reason without having been exercised or payment
having been made in respect of the entire Option or Award, the Shares allocable
to the expired, canceled or otherwise terminated portion of the Option or Award
may again be the subject of Options or Awards granted hereunder.
5. Option Grants for Eligible Individuals.
5.1 Authority of Committee. Subject to the provisions of the Plan,
the Committee shall have full and final authority to select those Eligible
Individuals who will receive Employee Options, and the terms and conditions of
the grant to such Eligible Individuals shall be set forth in an Agreement.
5.2 Purchase Price. The purchase price (which may be not less than
80% of the Fair Market Value on the date of grant) or the manner in which the
purchase price is to be determined for Shares under each Employee Option shall
be determined by the Committee and set forth in the Agreement; provided,
however, that the purchase price per Share under each Incentive Stock Option
shall not be less than 100% of the Fair Market Value of a Share on the date the
Employee Option is granted (110% in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder).
5.3 Maximum Duration. Employee Options granted hereunder shall be
for such term as the Committee shall determine, provided that an Incentive Stock
Option shall not be exercisable after the expiration of ten (10) years from the
date it is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder) and a Nonqualified Stock Option shall not
be exercisable after the expiration of ten (10) years from the date it is
granted. The Committee may, subsequent to the granting of any Employee Option,
extend the term thereof, but in no event shall the term as so extended exceed
the maximum term provided for in the preceding sentence.
5.4 Vesting. Subject to Section 7.4, each Employee Option shall
become exercisable in such installments (which need not be equal) and at such
times as may be designated by the Committee and set forth in the Agreement. To
the extent not exercised, installments shall accumulate and be exercisable, in
whole or in part, at any time after becoming exercisable, but not later than the
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date the Employee Option expires. The Committee may accelerate the
exercisability of any Employee Option or portion thereof at any time.
5.5 Modification. No modification of an Employee Option shall
adversely alter or impair any rights or obligations under the Employee Option
without the Optionee's consent.
6. Option Grants for Eligible Directors.
6.1 Grant of Options to Eligible Directors.
(a) Upon the conclusion of each regular annual meeting of the
Company's stockholders, each incumbent Eligible Director who will continue
serving as a member of the Board thereafter may receive a grant of a
Nonqualified Stock Option for such number of Shares as the Board shall determine
in its sole discretion; provided, however, that such grant shall not be made in
any calendar year in which the same individual receives an Option under (b)
below.
(b) New Eligible Directors may receive a one-time grant of a
Nonqualified Stock Option for a number of Shares as determined in the sole
discretion of the Board from time to time. Such Option, if any, shall be granted
on the date when such Eligible Director first joins the Board of Directors of
the Company.
6.2 Purchase Price. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Director Option shall
be determined by the Board and set forth in the Agreement; provided, however,
that the purchase price per Share under each Director Option shall not be less
than 100% of the Fair Market Value of a Share on the date of grant.
6.3 Maximum Duration. Director Options granted hereunder shall be
for such term as the Board shall determine, but in no event shall the term
exceed ten years. The Board may, subsequent to the granting of any Director
Option, extend the term thereof, but in no event shall the term as so extended
exceed the maximum term provided for in the preceding sentence.
6.4 Vesting. Subject to Section 7.4, each Director Option shall
become exercisable in such installments (which need not be equal) and at such
times as may be designated by the Board and set forth in the Agreement. To the
extent not exercised, installments shall accumulate and be exercisable, in whole
or in part, at any time after becoming exercisable, but not later than the date
the Nonemployee Stock Option expires. The Board may accelerate the
exercisability of any Director Option or portion thereof at any time.
6.5 Modification. No modification of a Director Option shall
adversely alter or impair any rights or obligations under the Director Option
without the Optionee's consent.
7. Terms and Conditions Applicable to All Options.
7.1 Transferability. Incentive Stock Options may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised
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during the lifetime of the Optionee, only by the Optionee. Other Options or
Awards shall not be transferrable except to the extent provided in the Option or
Award Agreement.
7.2 Method of Exercise.
(a) The exercise of an Option shall be made only by a written
notice delivered in person or by mail to the Secretary of the Company at the
Company's principal executive office, specifying the number of Shares to be
purchased and accompanied by payment therefor and otherwise in accordance with
the Agreement pursuant to which the Option was granted. The purchase price for
any Shares purchased pursuant to the exercise of an Option shall be paid, as
determined by the Committee in its discretion, in either of the following forms
(or any combination thereof): (i) cash; (ii) authorization for the Company to
retain from the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which the Option is exercised;
(iii) delivery of a properly executed exercise notice together with such other
documentation as the Committee and the broker, if applicable, shall require to
effect an exercise of the Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price and any applicable income or
employment taxes; (iv) the transfer of Shares to the Company upon such terms and
conditions as determined by the Committee; (v) any combination of the foregoing
methods of payment; or (vi) any other method approved by the Committee. Any
Shares transferred to the Company (or withheld upon exercise) as payment of the
purchase price under an Option shall be valued at their Fair Market Value on the
trading day preceding the date of exercise of such Option. The Optionee shall
deliver the Agreement evidencing the Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued
upon exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
(b) If the Fair Market Value of the Shares with respect to
which the Option is being exercised exceeds the exercise price of such Option,
an Optionee may, instead of exercising an Option as provided in Section 7.2(a),
request that the Committee authorize payment to the Optionee of the difference
between the Fair Market Value of part or all of the Shares which are the subject
of the Option and the exercise price of the Option, such difference to be
determined as of the date the Committee receives the request from the Optionee.
The Committee in its sole discretion may grant or deny such a request from an
Optionee with respect to part or all of the Shares as to which the Option is
then exercisable and, to the extent granted, shall direct the Company to make
the payment to the Optionee either in cash or in Shares or in any combination
thereof, provided, however, that any Share shall be distributed based upon its
Fair Market Value as of the date the Committee received the request from the
Optionee. An Option shall be deemed to have been exercised and shall be canceled
to the extent that the Committee grants a request pursuant to this Section
7.2(b).
7.3 Rights of Optionees. No Optionee shall be deemed for any purpose
to be the owner of any Shares subject to any Option unless and until (i) the
Option shall have been exercised pursuant to the terms thereof, (ii) the Company
shall have issued and delivered Shares to the Optionee, and (iii) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.
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7.4 Effect of Change in Control. In the event of a Change in
Control, all Options outstanding on the date of such Change in Control shall
become immediately and fully vested and exercisable. In addition, to the extent
set forth in an Agreement evidencing the grant of an Employee Option, an
Optionee will be permitted to surrender to the Company for cancellation within
sixty (60) days after such Change in Control any Employee Option or portion of
an Employee Option to the extent not yet exercised and the Optionee will be
entitled to receive a cash payment in an amount equal to the excess, if any, of
(x) (A) in the case of a Nonqualified Stock Option, the greater of (1) the Fair
Market Value, on the date preceding the date of surrender, of the Shares subject
to the Employee Option or portion thereof surrendered or (2) the Adjusted Fair
Market Value of the Shares subject to the Employee Option or portion thereof
surrendered or (B) in the case of an Incentive Stock Option, the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to the
Employee Option or portion thereof surrendered, over (y) the aggregate purchase
price for such Shares under the Employee Option or portion thereof surrendered.
In the event an Optionee's employment with, or service as a Director of, the
Company is terminated by the Company following a Change in Control, each Option
held by the Optionee that was exercisable as of the date of termination of the
Optionee's employment or service shall remain exercisable for a period ending
not before the earlier of (A) the first anniversary of the termination of the
Optionee's employment or service or (B) the expiration of the stated term of the
Option.
8. Stock Appreciation Rights. The Committee may in its discretion, either
alone or in connection with the grant of an Employee Option, grant Stock
Appreciation Rights in accordance with the Plan, the terms and conditions of
which shall be set forth in an Agreement. If granted in connection with an
Option, a Stock Appreciation Right shall cover the same Shares covered by the
Option (or such lesser number of Shares as the Committee may determine) and
shall, except as provided in this Section 8, be subject to the same terms and
conditions as the related Option.
8.1 Time of Grant. A Stock Appreciation Right may be granted (i) at
any time if unrelated to an Option, or (ii) if related to an Option, either at
the time of grant, or at any time thereafter during the term of the Option.
8.2 Stock Appreciation Right Related to an Option.
(a) Subject to Section 8.7, a Stock Appreciation Right granted
in connection with an Option shall be exercisable at such time or times and only
to the extent that the related Options are exercisable, and will not be
transferable except to the extent the related Option may be transferable. A
Stock Appreciation Right granted in connection with an Incentive Stock Option
shall be exercisable only if the Fair Market Value of a Share on the date of
exercise exceeds the purchase price specified in the related Incentive Stock
Option Agreement.
(b) Upon the exercise of a Stock Appreciation Right related to
an Option, the Grantee shall be entitled to receive an amount determined by
multiplying (A) the excess of the Fair Market Value of a Share on the date
preceding the date of exercise of such Stock Appreciation Right over the per
Share purchase price under the related Option, by (B) the number of Shares as to
which such Stock Appreciation Right is being exercised. Notwithstanding the
foregoing, the Committee may limit in any manner the amount payable with respect
to any Stock Appreciation Right by including such a limit in the Agreement
evidencing the Stock Appreciation Right at the time it is granted.
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(c) Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of the
number of Shares as to which the Stock Appreciation Right is exercised, and upon
the exercise of an Option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right shall be canceled to the extent of the number of
Shares as to which the Option is exercised or surrendered.
8.3 Stock Appreciation Right Unrelated to an Option. The Committee
may grant to Eligible Individuals Stock Appreciation Rights unrelated to
Options. Stock Appreciation Rights unrelated to Options shall contain such terms
and conditions as to exercisability (subject to Section 8.7), vesting and
duration as the Committee shall determine, but in no event shall they have a
term of greater than ten (10) years. Upon exercise of a Stock Appreciation Right
unrelated to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (A) the excess of the Fair Market Value of a Share on
the date preceding the date of exercise of such Stock Appreciation Right over
the Fair Market Value of a Share on the date the Stock Appreciation Right was
granted, by (B) the number of Shares as to which the Stock Appreciation Right is
being exercised. Notwithstanding the foregoing, the Committee may limit in any
manner the amount payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock Appreciation Right
at the time it is granted.
8.4 Method of Exercise. Stock Appreciation Rights shall be exercised
by a Grantee only by a written notice delivered in person or by mail to the
Secretary of the Company at the Company's principal executive office, specifying
the number of Shares with respect to which the Stock Appreciation Right is being
exercised. If requested by the Committee, the Grantee shall deliver the
Agreement evidencing the Stock Appreciation Right being exercised and the
Agreement evidencing any related Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Grantee.
8.5 Form of Payment. Payment of the amount determined under Sections
8.2(b) or 8.3 may be made in the discretion of the Committee solely in whole
Shares in a number determined at their Fair Market Value on the date preceding
the date of exercise of the Stock Appreciation Right, or solely in cash, or in a
combination of cash and Shares. If the Committee decides to make full payment in
Shares and the amount payable results in a fractional Share, payment for the
fractional Share will be made in cash.
8.6 Modification. No modification of an Award shall adversely alter
or impair any rights or obligations under the Agreement without the Grantee's
consent.
8.7 Effect of Change in Control. In the event of a Change in
Control, all Stock Appreciation Rights shall become immediately and fully vested
and exercisable. In addition, to the extent set forth in an Agreement evidencing
the grant of a Stock Appreciation Right, a Grantee will be entitled to receive a
payment from the Company in cash or stock, in either case, with a value equal to
the excess, if any, of (A) the greater of (x) the Fair Market Value, on the date
preceding the date of exercise, of the underlying Shares subject to the Stock
Appreciation Right or portion thereof exercised and (y) the Adjusted Fair Market
Value, on the date preceding the date of exercise, of the Shares over (B) the
aggregate Fair Market Value, on the date the Stock Appreciation Right was
granted, of the Shares subject to the Stock Appreciation Right or portion
thereof exercised. In the event a Grantee's employment with the Company is
terminated by the Company following a Change in Control each Stock Appreciation
Right held by the Grantee that was exercisable as of the date of termination of
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the Grantee's employment shall remain exercisable for a period ending not before
the earlier of the first anniversary of (A) the termination of the Grantee's
employment or (B) the expiration of the stated term of the Stock Appreciation
Right.
9. Dividend Equivalent Rights. Dividend Equivalent Rights may be granted
to Eligible Individuals in tandem with an Option or Award. The terms and
conditions applicable to each Dividend Equivalent Right shall be specified in
the Agreement under which the Dividend Equivalent Right is granted. Amounts
payable in respect of Dividend Equivalent Rights may be payable currently or
deferred until the lapsing of restrictions on such Dividend Equivalent Rights or
until the vesting, exercise, payment, settlement or other lapse of restrictions
on the Option or Award to which the Dividend Equivalent Rights relate. In the
event that the amount payable in respect of Dividend Equivalent Rights are to be
deferred, the Committee shall determine whether such amounts are to be held in
cash or reinvested in Shares or deemed (notionally) to be reinvested in Shares.
If amounts payable in respect of Dividend Equivalent Rights are to be held in
cash, there may be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a rate per
annum as the Committee, in its discretion, may determine. Dividend Equivalent
Rights may be settled in cash or Shares or a combination thereof, in a single
installment or multiple installments.
10. Restricted Stock.
10.1 Grant. The Committee may grant Awards to Eligible Individuals
of Restricted Stock, which shall be evidenced by an Agreement between the
Company and the Grantee. Each Agreement shall contain such restrictions, terms
and conditions as the Committee may, in its discretion, determine and (without
limiting the generality of the foregoing) such Agreements may require that an
appropriate legend be placed on Share certificates. Awards of Restricted Stock
shall be subject to the terms and provisions set forth below in this Section 10.
10.2 Rights of Grantee. Shares of Restricted Stock granted pursuant
to an Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of such
Shares. If a Grantee shall fail to execute the Agreement evidencing a Restricted
Stock Award, the appropriate blank stock powers and, in the discretion of the
Committee, an escrow agreement and any other documents which the Committee may
require within the time period prescribed by the Committee at the time the Award
is granted, the Award shall be null and void. At the discretion of the
Committee, Shares issued in connection with a Restricted Stock Award shall be
deposited together with the stock powers with an escrow agent (which may be the
Company) designated by the Committee. Unless the Committee determines otherwise
and as set forth in the Agreement, upon delivery of the Shares to the escrow
agent, the Grantee shall have all of the rights of a stockholder with respect to
such Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.
10.3 Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 10.4, such Shares shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated, nor shall they
be delivered to the Grantee.
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10.4 Lapse of Restrictions.
(a) Restrictions upon Shares of Restricted Stock awarded
hereunder shall lapse at such time or times and on such terms and conditions as
the Committee may determine. The Agreement evidencing the Award shall set forth
any such restrictions.
(b) Unless the Committee shall determine otherwise at the time
of the grant of an Award of Restricted Stock, the restrictions upon Shares of
Restricted Stock shall lapse upon a Change in Control. The Agreement evidencing
the Award shall set forth any such provisions.
10.5 Modification or Substitution. Subject to the terms of the Plan,
the Committee may modify outstanding Awards of Restricted Stock or accept the
surrender of outstanding Shares of Restricted Stock (to the extent the
restrictions on such Shares have not yet lapsed) and grant new Awards in
substitution for them. Notwithstanding the foregoing, no modification of an
Award shall adversely alter or impair any rights or obligations under the
Agreement without the Grantee's consent.
10.6 Treatment of Dividends. At the time an Award of Shares of
Restricted Stock is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on such Shares by the Company shall be (i) deferred until the
lapsing of the restrictions imposed upon such Shares and (ii) held by the
Company for the account of the Grantee until such time. In the event that
dividends are to be deferred, the Committee shall determine whether such
dividends are to be reinvested in shares of Stock (which shall be held as
additional Shares of Restricted Stock) or held in cash. If deferred dividends
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends in respect of Shares of Restricted Stock (whether
held in cash or as additional Shares of Restricted Stock), together with
interest accrued thereon, if any, shall be made upon the lapsing of restrictions
imposed on the Shares in respect of which the deferred dividends were paid, and
any dividends deferred (together with any interest accrued thereon) in respect
of any Shares of Restricted Stock shall be forfeited upon the forfeiture of such
Shares.
10.7 Delivery of Shares. Upon the lapse of the restrictions on
Shares of Restricted Stock, the Committee shall cause a stock certificate to be
delivered to the Grantee with respect to such Shares, free of all restrictions
hereunder.
11. Performance Awards.
11.1 Performance Objectives.
(a) Performance Objectives for Performance Awards may be
expressed in terms of (i) earnings per Share, (ii) Share price, (iii) pre-tax
profits, (iv) net earnings, (v) return on equity or assets, (vi) revenues, (vii)
EBITDA, (viii) market share or market penetration or (ix) any combination of the
foregoing, and may be determined before or after accounting changes, special
charges, foreign currency effects, acquisitions, divestitures or other
extraordinary events. Performance Objectives may be in respect of the
performance of the Company and its Subsidiaries (which may be on a consolidated
basis), a Subsidiary or a Division. Performance Objectives may be absolute or
relative and may be expressed in terms of a progression within a specified
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range. The Performance Objectives with respect to a Performance Cycle shall be
established in writing by the Committee by the earlier of (i) the date on which
a quarter of the Performance Cycle has elapsed or (ii) the date which is ninety
(90) days after the commencement of the Performance Cycle, and in any event
while the performance relating to the Performance Objectives remains,
substantially uncertain.
(b) Prior to the vesting, payment, settlement or lapsing of
any restrictions with respect to any Performance Award made to a Grantee who is
subject to Section 162(m) of the Code, the Committee shall certify in writing
that the applicable Performance Objectives have been satisfied.
11.2 Performance Units. (a) The Committee, in its discretion, may
grant Awards of Performance Units to Eligible Individuals, the terms and
conditions of which shall be set forth in an Agreement between the Company and
the Grantee. Performance Units shall be denominated in Shares or a specified
dollar amount and, contingent upon the attainment of specified Performance
Objectives within the Performance Cycle, represent the right to receive payment
as provided in Section 11.2(c) of the specified dollar amount or a percentage
(which may be more than 100%) thereof depending on the level of Performance
Objective attainment; provided, however, that, the Committee may at the time a
Performance Unit is granted specify a maximum amount payable in respect of a
vested Performance Unit. Each Agreement shall specify the number of Performance
Units to which it relates, the Performance Objectives which must be satisfied in
order for the Performance Units to vest and the Performance Cycle within which
such Performance Objectives must be satisfied.
(b) Subject to Sections 11.1(c) and 11.4, a Grantee shall
become vested with respect to the Performance Units to the extent that the
Performance Objectives set forth in the Agreement are satisfied for the
Performance Cycle.
(c) Payment to Grantees in respect of vested Performance Units
shall be made as soon as practicable after the last day of the Performance Cycle
to which such Award relates unless the Agreement evidencing the Award provides
for the deferral of payment, in which event the terms and conditions of the
deferral shall be set forth in the Agreement. Subject to Section 11.4, such
payments may be made entirely in Shares valued at their Fair Market Value as of
the last day of the applicable Performance Cycle or such other date specified by
the Committee, entirely in cash, or in such combination of Shares and cash as
the Committee in its discretion shall determine at any time prior to such
payment; provided, however, that if the Committee in its discretion determines
to make such payment entirely or partially in Shares of Restricted Stock, the
Committee must determine the extent to which such payment will be in Shares of
Restricted Stock and the terms of such Restricted Stock at the time the Award is
granted.
11.3 Performance Shares. The Committee, in its discretion, may grant
Awards of Performance Shares to Eligible Individuals, the terms and conditions
of which shall be set forth in an Agreement between the Company and the Grantee.
Each Agreement may require that an appropriate legend be placed on Share
certificates. Awards of Performance Shares shall be subject to the following
terms and provisions:
(a) The Committee shall provide at the time an Award of
Performance Shares is made the time or times at which the actual Shares
represented by such Award shall be issued in the name of the Grantee; provided,
however, that no Performance Shares shall be issued until the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
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and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of such
Performance Shares. If a Grantee shall fail to execute the Agreement evidencing
an Award of Performance Shares, the appropriate blank stock powers and, in the
discretion of the Committee, an escrow agreement and any other documents which
the Committee may require within the time period prescribed by the Committee at
the time the Award is granted, the Award shall be null and void. At the
discretion of the Committee, Shares issued in connection with an Award of
Performance Shares shall be deposited together with the stock powers with an
escrow agent (which may be the Company) designated by the Committee. Except as
restricted by the terms of the Agreement, upon delivery of the Shares to the
escrow agent, the Grantee shall have, in the discretion of the Committee, all of
the rights of a stockholder with respect to such Shares, including the right to
vote the Shares and to receive all dividends or other distributions paid or made
with respect to the Shares.
(b) Until any restrictions upon the Performance Shares awarded
to a Grantee shall have lapsed in the manner set forth in Sections 11.3(c) or
11.4, such Performance Shares shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated, nor shall they
be delivered to the Grantee. The Committee may also impose such other
restrictions and conditions on the Performance Shares, if any, as it deems
appropriate.
(c) Subject to Sections 11.1(b) and 11.4, restrictions upon
Performance Shares awarded hereunder shall lapse and such Performance Shares
shall become vested at such time or times and on such terms, conditions and
satisfaction of Performance Objectives as the Committee may, in its discretion,
determine at the time an Award is granted.
(d) At the time the Award of Performance Shares is granted,
the Committee may, in its discretion, determine that the payment to the Grantee
of dividends, or a specified portion thereof, declared or paid on actual Shares
represented by such Award which have been issued by the Company to the Grantee
shall be (i) deferred until the lapsing of the restrictions imposed upon such
Performance Shares and (ii) held by the Company for the account of the Grantee
until such time. In the event that dividends are to be deferred, the Committee
shall determine whether such dividends are to be reinvested in shares of Stock
(which shall be held as additional Performance Shares) or held in cash. If
deferred dividends are to be held in cash, there may be credited at the end of
each year (or portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum as the Committee, in its discretion,
may determine. Payment of deferred dividends in respect of Performance Shares
(whether held in cash or in additional Performance Shares), together with
interest accrued thereon, if any, shall be made upon the lapsing of restrictions
imposed on the Performance Shares in respect of which the deferred dividends
were paid, and any dividends deferred (together with any interest accrued
thereon) in respect of any Performance Shares shall be forfeited upon the
forfeiture of such Performance Shares.
(e) Upon the lapse of the restrictions on Performance Shares
awarded the Committee shall cause a stock certificate to be delivered to the
Grantee, free of all restrictions hereunder.
11.4 Effect of Change in Control. In the event of a Change in
Control:
(a) With respect to Performance Units, unless otherwise
determined by the Committee, the Grantee shall (i) become vested in all
Performance Units and (ii) be entitled to receive in respect of all Performance
Units which become vested as a result of a Change in Control a cash payment
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within ten (10) days after such Change in Control in an amount as determined by
the Committee at the time of the Award of such Performance Unit and as set forth
in the Agreement.
(b) With respect to Performance Shares, unless otherwise
determined by the Committee, restrictions shall lapse immediately on all
Performance Shares.
(c) The Agreements evidencing Performance Shares and
Performance Units shall provide for the treatment of such Awards (or portions
thereof) which do not become vested as the result of a Change in Control,
including, but not limited to, provisions for the adjustment of applicable
Performance Objectives.
11.5 Modification or Substitution. Subject to the terms of the Plan,
the Committee may modify outstanding Performance Awards or accept the surrender
of outstanding Performance Awards and grant new Performance Awards in
substitution for them. Notwithstanding the foregoing, no modification of a
Performance Award shall adversely alter or impair any rights or obligations
under the Agreement without the Grantee's consent.
12. Effect of a Termination of Employment; Forfeiture Provisions.
12.1 Termination of Employment. An employment agreement, if
applicable, between an Optionee or Grantee and the Company shall govern with
respect to the terms and conditions applicable to such Option or Award upon a
termination or change in the status of the employment of the Optionee or
Grantee. However, in absence of an employment agreement, the following shall
apply:
(a) The Agreement evidencing the grant of each Option and each Award
shall set forth the terms and conditions applicable to such Option or Award upon
a termination or change in the status of the employment of the Optionee or
Grantee by the Company, a Subsidiary or a Division (including a termination or
change by reason of the sale of a Subsidiary or a Division), which, except for
Director Options, shall be as the Committee may, in its discretion, determine at
the time the Option or Award is granted or thereafter.
(b) Unless otherwise determined by the Committee at the time of
grant (and set forth in the Option Agreement) or at a later date, except in the
case of death and Disability as provided in paragraphs 12(c) and 12(d) below, if
an Optionee of an Employee Option granted under the Plan has a Termination of
Employment with the Company or a Subsidiary, any unexercised Employee Option
held by such Optionee shall expire ninety (90) days after the Optionee has a
Termination of Employment for any reason other than a termination for Cause or a
Voluntary Termination (as defined below), and such Employee Option may only be
exercised by the Optionee or his Beneficiary to the extent that the Employee
Option or a portion thereof was exercisable on the date of Termination of
Employment; provided, however, no Employee Option may be exercised after the
expiration date specified for the particular Employee Option in the Employee
Option grant. If the Optionee's Termination of Employment arises as a result of
a termination for Cause or a Voluntary Termination, then, unless the Committee
determines otherwise at the time of the Termination of Employment, any
unexercised Options held by such Optionee shall terminate and expire
concurrently with the Optionee's Termination of Employment. A "Voluntary
Termination" shall mean the voluntary Termination of Employment by an Optionee
prior to five years of total Service (as defined below) as an employee with the
Company and its Subsidiaries. "Service" shall mean total of years for which the
Optionee, prior to or after first becoming an Optionee, has 1,000 hours
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of service as an employee or otherwise with, or has served as a director or
officer of, the Company or a Subsidiary.
(c) Unless otherwise determined by the Committee at the time of
grant (and set forth in the Option Agreement) or at a later date, if an Optionee
dies while still employed by the Company, the shares which the Optionee was
entitled to exercise on the date of the Optionee's death under an Option or
Options granted under the Plan may be exercised at any time after the Optionee's
death by the Optionee's beneficiary; provided, however, that no Option may be
exercised after the earlier of: (i) one (1) year after the Optionee's death or
(ii) the expiration date specified for the particular Option in the Option
Agreement.
(d) Unless otherwise determined by the Committee at the time of
grant (and set forth in the Option Agreement) or at a later date, if an Optionee
becomes disabled within the meaning of Section 2.14 hereof, any unexercised
Employee Option held by such disabled Optionee shall expire one (1) year after
the Optionee has a Termination of Employment because of such Disability and such
Option may only be exercised by the Optionee or his Beneficiary to the extent
that the Employee Option or a portion thereof was exercisable on the date of
Termination of Employment because of such Disability; provided, however, no
Employee Option may be exercised after the expiration date specified for the
particular Employee Option in the Employee Option grant.
12.2 Forfeiture Provisions. The Committee may, in its sole
discretion, include in the terms of any Option or Award provisions providing for
(i) the termination of an Option or Award, (ii) forfeiture of the gain on any
Option exercises or realized pursuant to any Award, (iii) the right of the
Company to repurchase any Shares acquired pursuant to an Option or Award, or
(iv) forfeiture of shares of Stock acquired pursuant to an Award (and any gain
realized on the sale of the Shares is subject to repayment to the Company), if
an Optionee or Grantee engages in any activity during the Optionee's or
Grantee's employment and such period thereafter as may be determined by the
Board, in competition with any activity of the Company, or inimical, contrary or
harmful to the interests of the Company, including, but not limited to (i)
conduct related to the Optionee's or Grantee's employment for which either
criminal or civil penalties may be sought, (ii) the commission of an act of
fraud or intentional misrepresentation, (iii) embezzlement or misappropriation
or conversion of assets or opportunities of the Company, (iv) accepting
employment with or serving as a consultant, adviser or in any other capacity to
an employer that is in competition with or acting against the interest of the
Company, (v) disclosing or misusing any confidential or proprietary information
of the Company, or (vi) participating in a hostile takeover attempt of the
Company. The Committee may condition any grant on the potential Optionee's or
Grantee's agreement to such terms and conditions.
13. Adjustment Upon Changes in Capitalization.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to (i) the maximum
number and class of Shares or other stock or securities with respect to which
Options or Awards may be granted under the Plan, (ii) the maximum number and
class of Shares or other stock or securities with respect to which Options or
Awards may be granted to any Eligible Individual during the term of the Plan,
(iii) the number and class of Shares or other stock or securities which are
subject to outstanding Options or Awards granted under the Plan and the purchase
price therefor, if applicable, (iv) the number and class of Shares or other
securities in respect of which Director Options are to be granted under Section
6 and (v) the Performance Objectives.
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(b) Any such adjustment in the Shares or other stock or securities
subject to outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a modification
as defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, a Grantee of an
Award shall be entitled to, or an Optionee shall be entitled to exercise an
Option with respect to, new, additional or different shares of stock or
securities, such new, additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Shares subject to the Award or Option, as the case may be,
prior to such Change in Capitalization.
14. Effect of Certain Transactions. Subject to Sections 7.4, 8.7, 10.4(b)
and 11.4 or as otherwise provided in an Agreement, in the event of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation of
the Company (a "Transaction"), the Plan and the Options and Awards issued
hereunder shall continue in effect in accordance with their respective terms,
except that following a Transaction each Optionee and Grantee shall be entitled
to receive in respect of each Share subject to any outstanding Options or
Awards, as the case may be, upon exercise of any Option or payment or transfer
in respect of any Award, the same number and kind of stock, securities, cash,
property or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property, or other consideration shall remain subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Options and Awards prior to such Transaction.
15. Interpretation. Following the required registration of any equity
security of the Company pursuant to Section 12 of the Exchange Act:
(a) The Plan is intended to comply with Rule 16b-3 promulgated under
the Exchange Act and the Committee shall interpret and administer the provisions
of the Plan or any Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall not affect the
validity of the Plan.
(b) Unless otherwise expressly stated in the relevant Agreement,
each Option, Stock Appreciation Right and Performance Award granted under the
Plan is intended to be performance-based compensation within the meaning of
Section 162(m)(4)(C) of the Code. The Committee shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to such
Options or Awards if the ability to exercise such discretion or the exercise of
such discretion itself would cause the compensation attributable to such Options
or Awards to fail to qualify as performance-based compensation.
16. Pooling Transactions. Notwithstanding anything contained in the Plan
or any Agreement to the contrary, in the event of a Change in Control which is
also intended to constitute a Pooling Transaction, the Committee shall take such
actions, if any, as are specifically recommended by an independent accounting
firm retained by the Company to the extent reasonably necessary in order to
assure that the Pooling Transaction will qualify as such, including but not
limited to (i) deferring the vesting, exercise, payment, settlement or lapsing
of restrictions with respect to any Option or Award, (ii) providing that the
payment or settlement in respect of any Option or Award be made in the form of
cash, Shares or securities of a successor or acquiror of the Company, or a
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combination of the foregoing, and (iii) providing for the extension of the term
of any Option or Award to the extent necessary to accommodate the foregoing, but
not beyond the maximum term permitted for any Option or Award.
17. Effective Date, Termination and Amendment of the Plan. The effective
date of this Plan shall be the date the Plan is adopted by the Board, subject
only to the approval by the affirmative vote of the holders of a majority of the
securities of the Company present, or represented, and entitled to vote at a
meeting of stockholders duly held in accordance with the applicable laws of the
State of Utah within twelve (12) months of the adoption of the Plan by the
Board.
No new Awards under the Plan shall be granted after the day preceding the
tenth anniversary of the date of its adoption by the Board and no Option or
Award may be granted thereafter. The Board may sooner terminate the Plan and the
Board may at any time and from time to time amend, modify or suspend the Plan;
provided, however, that: (a) no such amendment, modification, suspension or
termination shall impair or adversely alter any Options or Awards theretofore
granted under the Plan, except with the consent of the Optionee or Grantee, nor
shall any amendment, modification, suspension or termination deprive any
Optionee or Grantee of any Shares which he or she may have acquired through or
as a result of the Plan; and (b) to the extent necessary under applicable law,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law.
18. Non-Exclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.
19. Limitation of Liability. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:
(i) give any person any right to be granted an Option or Award other
than at the sole discretion of the Committee;
(ii) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
(iii) limit in any way the right of the Company to terminate the
employment of any person at any time; or
(iv) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person at any particular rate of
compensation or for any particular period of time.
20. Regulations and Other Approvals; Governing Law.
20.1 Governing Law. Except as to matters of federal law, the Plan
and the rights of all persons claiming hereunder shall be construed and
determined in accordance with the laws of the State of Utah without giving
effect to conflicts of laws principles thereof.
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20.2 Applicable Laws. The obligation of the Company to sell or
deliver Shares with respect to Options and Awards granted under the Plan shall
be subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Committee.
20.3 Rules and Regulations. The Board may make such changes as may
be necessary or appropriate to comply with the rules and regulations of any
government authority, or to obtain for Eligible Individuals granted Incentive
Stock Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
20.4 Securities Regulations. Each Option and Award is subject to the
requirement that, if at any time the Committee determines, in its discretion,
that the listing, registration or qualification of Shares issuable pursuant to
the Plan is required by any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body is necessary
or desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
20.5 Restrictions on Shares. Notwithstanding anything contained in
the Plan or any Agreement to the contrary, in the event that the disposition of
Shares acquired pursuant to the Plan is not covered by a then current
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), and is not otherwise exempt from such registration, such
Shares shall be restricted against transfer to the extent required by the
Securities Act and Rule 144 or other regulations thereunder. The Committee may
require any individual receiving Shares pursuant to an Option or Award granted
under the Plan, as a condition precedent to receipt of such Shares, to represent
and warrant to the Company in writing that the Shares acquired by such
individual are acquired without a view to any distribution thereof and will not
be sold or transferred other than pursuant to an effective registration thereof
under said Act or pursuant to an exemption applicable under the Securities Act
or the rules and regulations promulgated thereunder. The certificates evidencing
any of such Shares shall be appropriately amended to reflect their status as
restricted securities as aforesaid.
21. Miscellaneous.
21.1 Multiple Agreements. The terms of each Option or Award may
differ from other Options or Awards granted under the Plan at the same time, or
at some other time. The Committee may also grant more than one Option or Award
to a given Eligible Individual during the term of the Plan, either in addition
to, or in substitution for, one or more Options or Awards previously granted to
that Eligible Individual.
21.2 Withholding of Taxes.
(a) At such times as an Optionee or Grantee recognizes taxable
income in connection with the receipt of Shares or cash hereunder (a "Taxable
Event"), the Optionee or Grantee shall pay to the Company an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld by the Company in connection with the Taxable Event (the
"Withholding Taxes") prior to the issuance, or release from escrow, of such
Shares or the payment of such cash. The
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Company shall have the right to deduct from any payment of cash to an Optionee
or Grantee an amount equal to the Withholding Taxes in satisfaction of the
obligation to pay Withholding Taxes. In satisfaction of the obligation to pay
Withholding Taxes to the Company, the Optionee or Grantee may make a written
election (the "Tax Election"), which may be accepted or rejected in the
discretion of the Committee, to have withheld a portion of the Shares then
issuable to him or her having an aggregate Fair Market Value equal to the
Withholding Taxes.
(b) If an Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive
office.
21.3 Options Granted under Original Plan. The amendment and
restatement of the Original Plan shall not, unless required by law, impair the
rights of an Optionee with respect to any Option granted prior to the effective
date of the amendment and restatement of the Original Plan without the consent
of such Optionee, and, to the extent of any such impairment, the terms of the
Original Plan, prior to its amendment and restatement shall continue to apply to
such Option. The terms of the Plan shall not apply to any Option granted prior
to the Effective Date to the extent such amendment and restatement would cause
an Incentive Stock Option Agreement not to qualify under Section 422 of the Code
or would result in the Company having to recognize an expense for financial
reporting purposes as a result of such change or amendment, unless otherwise
agreed to by the Company and the Optionee. Such Options shall continue to be
governed by the terms of the Original Plan.
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